It has become one of the City's biggest talking points: how much further has the gold price got to go? It is up more than sixfold since former chancellor Gordon Brown sold off more than half of Britain's reserves in 1999.

Gold has breached a record $1,600 (£972) an ounce, and forecasts become wilder by the day. Hedge fund boss Christian Baha says the price could soar to $3,000. He believes western governments will print more money to stimulate their economies, further devaluing currencies, and at times of uncertainty, increasing gold's appeal as the ultimate safe haven: "I think there's more volatility coming up. I hope [government] deficits disappear, but if they don't, I want to be protected."

HSBC says gold could top $2,600 an ounce over the next few years amid fears that the sovereign debt crisis is far from over. At that level, it will break through its inflation-adjusted record of $2,400 achieved at the peak in 1980, when the scourge of inflation threatened to bring western economies to their knees.

Charlie Morris, who runs HSBC's absolute return fund, says he is not actually forecasting prices will hit that point, but admits: "I think it's a possibility… given the double whammy of the US debt crisis and turmoil in the eurozone."

Peter Hambro, chairman of Russian gold producer Petropavlovsk, says that "given the indebtedness of western countries, and the failure of politicians to properly tackle the problem, the value of gold will continue to rise". And one analyst adds: "Gold is being lifted by two important factors – fear that the currency system is unravelling, and that more quantitative easing will set the stage for inflation down the line."

It's not just investment funds that have caught the bug: central banks have also been piling in. China, India, Brazil and Saudi Arabia have been bolstering their stocks as a hedge against the falling US currency.

For years, central banks were net sellers of gold, accepting the assumed wisdom of the time that it is more profitable to hold sovereign debt instruments, with their steady returns, than non-yielding gold. That philosophy has been turned on its head, with central banks turning net buyers in 2010 for the first time in 21 years.

In May, it emerged that Mexico's central bank had bought 100 tonnes of gold bullion, the latest in a series of large acquisitions by emerging-market central banks. In China, private investors have been behind a surge in gold bullion imports as consumers seek a hedge against inflation. The World Gold Council says China has imported 200 tonnes so far this year, against 260 tonnes for the whole of 2010.

For bullion traders such as ATS, the 21st-century version of the gold rush has seen profits more than double since 2007. Britain's largest gold trader, Baird & Co, says its profits have risen from £1.4m in 2005 to £5m in 2010. Others to gain from the gold rush include:

■ Fund managers Private investors have poured cash into gold funds in the last few years. Figures from Lipper FMI show that in 2009 investors put €3.2bn (£2.7bn) into European funds focused specifically on the precious metal, including exchange traded funds. That fell to €2.9bn last year and €830m so far this year, but even so, those figures are a huge increase on the €184m flowing into the funds in 2007.

Steve Ellis works for Baker Steel, and will shortly launch a new fund investing in both gold and gold equities."There's certainly lots of interest. We had a meeting the other day, and 20 analysts turned up, when you would expect five or 10. Rooms are filling up. We are seeing quite a few flows [into funds] this last month."

Ellis argues that, even so, the proportion of long-term investment cash devoted to gold remains low, with only around 1% to 1.5% of assets held for investment globally being allocated to gold.

"It doesn't feel like this is an investment where people are being told to invest by their taxi drivers."

The biggest of the UK gold funds is Blackrock Gold and General, which invests in gold equities. Over five years, investors in the fund have seen their stakes grow 130% and fund manager Evy Hambro now has £2.9bn at his disposal.

■ Gold miners London's big listed miners have had a more complicated ride. African-focused Randgold has outshone even the gold price, but it's the exception rather than the rule. Its share price has risen more than fivefold over the past five years, but its peers have not matched it. Of the big gold miners, African Barrick Gold, Tanzania's largest gold producer, is almost 16% down this year, for instance, while Petropavlovsk has fallen almost 28% over the same period. Gold has risen 15% since January, and Randgold is up 6.5% over the same period.

There are many complex reasons why the mining shares don't track the gold price exactly, but analyst David Hargreaves says one of the key reasons is political: "The companies would like to maximise their profit, but governments often say when the price soars 'we want an increased take'."

■ Jewellers For jewellery trade, the surge in the gold price has cut both ways. Ben Roberts, managing director of Welsh gold specialists Clogau, says: "The rising price for gold is almost a double-edged sword as it prices many [potential buyers] out of the market.

"For us and many other brands, it's not so much about the commodity price, it's about the brand itself. Many in the marketplace who supply unbranded jewellery have found it very difficult to survive."